Replacing and repairing damaged shipments can cost a significant amount of money, especially if more than one item is damaged. Losses or damages to shipments under your company’s responsibility may cost a lot of money to replace or repair.
Cargo Insurance or Freight Insurance is a form of Commercial Insurance, which protects the consignor of freight from physical loss or damage while the item is in transit. Most businesses these days conduct their business online that requires shipping. Large to small items can be fragile and expensive to replace by the courier with the same quality. If an item is damaged while in transit to its destination, the insurance provider will typically reimburse the policyholder for the amount of the damaged goods.
Cargo Insurance can be beneficial whether the shipment is made on land, sea, or air. It also can be used for international or domestic transportation.
This insurance provides coverage to land transportations that carry goods such as trucks and other utility vehicles. It covers theft, collision damage, and other related risks. This insurance coverage is occurring inside of the country and operates within the nation’s boundaries.
Cargo Insurance offers Marine Coverage for goods that are being transported through the sea or by air. Freight Insurance coverage covers both transportations and goods from the damages due to weather contingencies and other relevant issues. This form of insurance coverage mostly includes international transit.
This form of coverage provides broad against loss or damage from external causes. Even though it is called All- Risk coverage, there are still exclusions of many types of damage in most policies, such as improper packing, infestation, and rejection by customs. It is necessary to check and understand your policy to determine what kind of losses are not covered.
Free of Particular Average (FPA) is additional coverage you can add to your policy that protects small businesses owners against losses from certain perils such as:
However, when it comes to ocean shipping, the exact losses covered might also depend on the location of the freight being stored.
This form of Cargo Insurance coverage covers maritime losses. General Average Insurance Coverage requires cargo owners and shipowners to contribute to indemnify whose cargo was lost.
Most Freight Insurance typically offers warehouse -to- warehouse coverage. This coverage takes effect from the moment the goods are placed in the origin warehouse until the moment it is delivered to its destination warehouse. On the other hand, the coverage may not take effect until the goods are on the ship, plane, train, and utility vehicles.
Take note that it may not cover goods after they left the vehicle and entered the warehouse. This form of coverage will not include any goods that are picked up and brought to the shipper by another party.
This form of Cargo Insurance Policy is the most purchased type of policy. The insurance provider agrees to gives coverage for the entire shipment while the policy is active. Open Cover Policy can be renewed for each shipment or purchase as a permanent policy that covers numbers of shipments.
Specific Cargo Policy or Voyage Policy is a type of coverage in Freight Insurance policy that covers particular consignment. This form of policy is used when a shipment needs coverage until it arrives at its destination. Specific Cargo policy only covers the item itself, and do not cover the commercial vehicles that carry it.
Bare Walls-In Coverage is generally designed to cover the commonly-used areas in multi-family residential buildings. This insurance would cover the exterior framing of the building, as well as some furnishings and fixtures in the common areas. In addition, it could also give coverage to the property of the condo association. However, this is not applicable to cover the belongings inside your unit, so it is much better to purchase your own Condominium Insurance.
The cost of your insurance premium will depend on how high the value of the goods you are transporting.
Your policy limit is one factor that may affect your premium rate. However, the higher the limit you, the more comprehensive coverage you receive. InsureHopper will help you find the best rate with the trusted insurance providers.
The number of record losses is one of the most significant factors that may affect your premium rate. The number of losses you file in your policy history, the higher chances you may get a high premium rate.
Cargo Insurance is not a requirement; unlike other businesses that used operating business vehicles, it is required for them to carry insurance. However, it is highly recommended as a business owner. You may face a substantial risk of liability for all the freights under your responsibility. Without Cargo Insurance, you may lose a considerable part of your cargo.